NRF Forecasts Holiday Sales to Decrease 1 Percent
Sales for the upcoming holiday season will decrease 1 percent compared with the 2008 holiday season, according to a forecast released Oct. 6 by the National Retail Federation, an organization for retailers based in Washington, D.C.
The NRF forecasts holiday retail sales will be $437.6 billion for the 2009 holiday retail season, compared with the $441.97 billion made during the bleak 2008 holiday retail season. Sales declined 3.4 percent in 2008 compared with the 2007 holiday retail season, according to the NRF. For the past decade, holiday sales increased on average 3.39 percent over the previous year.
Still, there is a bright side to a season of expected declines, said NRF spokesperson Ellen Davis. Retailers are prepared to endure a tough market. Most of them will keep inventories lean during the season, which should help protect their profits and prevent them from being forced to offer steep discounts this year. Many retailers earn 25 percent to 50 percent of their profits during the holiday season.
Consumers are forecast to opt against buying expensive presents for this upcoming season, Davis said. “It will be the holiday of the blue jean instead of the Blue-ray,” Davis said, referring to the high-technology DVD player.
Even luxury consumers are feeling frugal, according to Unity Marketing, a Stevens, Penn., market-research group that surveys luxury shoppers. Its study, released Oct. 6, found that 40 percent of the affluent consumers it surveyed planned to spend less on holiday gifts compared with last year, but 50 percent expected to spend the same as it did in the past year.
However, there might be a pleasant December surprise for retailers. The NRF’s Davis stated one-fifth of surveyed consumers have not made up their minds on how much they will spend for the 2009 holiday season. Some might increase their spending.
The International Council on Shopping Centers also forecast a relatively cheery holiday. The New York–based trade group for shopping centers forecast sales would increase 1 percent for the upcoming Christmas season compared with last year’s holiday sales seasons.—Andrew Asch
